Faq’s

What sets Cornerstone apart?

What is the difference between financial security, independence, and freedom?

Financial security, independence, and freedom are often used interchangeably, but they represent different stages or concepts in personal finance.

 

Here’s a breakdown of each with my thoughts.

 

  1. Financial Security

Financial security is step one, which refers to having enough resources and income to cover your basic living expenses and needs without constant worry about money and with no bad debt.

 

  • Emergency Fund: Enough savings to cover 3-6 months of living expenses.
  • Insurance: Adequate coverage (health, life, disability) to protect against unexpected events.
  • Stable Income: Consistent income stream that meets or exceeds your regular expenses.
  • Debt Management: Low or manageable debt levels, often focusing on paying off high-interest debt.
  • Investing: Might be investing some every month, but not enough to get ahead or become financially independent yet.

 

Goal: Peace of mind, knowing you can handle financial emergencies and meet your daily needs without stress.

 

  1. Financial Independence

Financial independence is when you have enough passive income (from real estate and stock investments, savings, or other sources) to cover your living expenses without needing to work for a living.

 

At this stage, work becomes optional as your investments or assets generate sufficient income to support your lifestyle. However, my goal is that people don’t become financially independent to do nothing, but rather what they’re most passionate about!

 

I am blessed to say that we are where we are due to a combination of factors, including rental income, investment income, and other income from some land we inherited that’s been very significant in our journey. That was one of the largest reasons I left my safe Army career, where I was making good money and had a 0% chance of losing it, to become a financial planner. As a financial planner, I could help people do this while working on my terms and having more control over my time.

 

  • Passive Income: Rental income and investment income cover living expenses.
  • Investment Portfolio: A well-diversified portfolio that provides sustainable income over time and is expected to outpace your spending and outlive you!
  • F-U Money: Having the wealth and income to be able to walk away from a job you don’t want or the ability to take a sabbatical for months to years if desired.
  • Retirement Planning: The ability to pursue your passion work or family without being forced to work for an income.
  • Goal: Having the freedom to choose whether to work, change careers, or retire without financial constraints.

 

  1. Financial Freedom

Financial freedom is considered the highest level, where you have enough money to do whatever you want, wherever you want, and all on your timeline. Essentially, financial freedom is the lack of financial need in any way without concern about outliving your money.

 

  • Complete Control: You have full control over your time and financial resources.
  • Abundant Wealth: Your wealth far exceeds your basic and even aspirational needs. You don’t need to worry about outliving your money!
  • Unlimited Choices: Ability to make decisions based on desire rather than necessity.
  • Philanthropy or Legacy: Often involves significant charitable giving or leaving a legacy.
  • Goal: To live life entirely on your own terms, without financial worries, obligations, or constraints.

 

 

Summary
Financial Security is about meeting your basic needs and protecting against risks.

Financial Independence is about having enough passive income to cover your living expenses without needing to work.

Financial Freedom is about having abundant wealth that allows you to live life with complete financial autonomy and pursue your dreams and passions.

 

My perspective is we ought to all steward what we’ve been blessed to receive and achieve in a way that honors God, loves our neighbors, and makes the world a better place. That’s what we aim to do!

What is the difference between financial security, independence, and freedom?

I provide comprehensive financial planning to help my clients take a holistic approach to managing their finances and make wise, informed life and financial decisions.

 

Systematic processes are typically the best way to do that, and comprehensive financial planning is the best way I know to do that for my clients.

 

Comprehensive financial planning involves evaluating your current financial situation, identifying your life & financial goals, and developing a personalized strategic plan to help you achieve them.

 

My plans emphasize aggressive investment strategies aimed at helping people build a secure financial future, replacing their income with passive rental and investment income over the long term.

 

However, they also include the essential components of:

  • Tax planning (it’s not the first thing we do, but one of the most important aspects of all financial planning!)
  • Cash flow planning (developing a values-based spending plan)
  • Risk mitigation (minimize your exposure to risks and insure against those you can’t cover)
  • Estate planning (ensuring you’re set up with a tax-efficient estate plan aligned with your values and goals)
What does it mean to be a fiduciary?

Under the Investment Advisor’s Act of 1940, and as a Chartered Financial Consultant (ChFC®) and Candidate for CFP® Certification, I am always required to act in my client’s best interest and place my client’s interests ahead of mine, i.e., as a fiduciary.

 

However, I also believe that while a good standard, like all regulations, the fiduciary standard remains the lowest bar for financial planners and advisors to adhere to be considered “ethical.”

 

My fiduciary standard is “…whatever you do, in word or deed, do everything in the name of the Lord Jesus, giving thanks to God the Father through him.” (Colossians 3:17)

 

While I am serving my clients, there is also a Higher Power that I am also seeking to please who knows my heart. I’m not perfect, but I do my best to live this out personally and professionally. 

 

Back to the regulated fiduciary standard, I have signed Fiduciary Oaths with XYPN and NAPFA.

 

You can confirm my status as a fiduciary investment advisor at https://brokercheck.finra.org/.

(You may also check the status of any other advisor you’re working with or considering working with to see if they’re a broker or investment advisor.)

 

If you see an ” IA “, that means the advisor is an “investment advisor” beholden to the fiduciary standard, as I am. However, a ” B ” means the advisor is a “broker” who sells products and earns commissions, which is why I don’t have a ” B ” if you look me up. This means they operate under the suitability standard under FINRA.

 

Often, you’ll see advisors who are both investment advisors and brokers. This tends to happen in larger firms where advisors are also salesmen. I believe this is where much of the confusion and lack of trust in the financial industry stems from—their advice must be fiduciary, but their recommendations for implementing the advice must only meet the suitability standard. This creates confusion for clients as it’s hard to know if what’s being recommended is truly in their best interest or merely suitable.

 

This is why it’s so important for me to be fee-only and flat-fee, to increase the transparency of my fees for my service so my clients can make as informed of a decision as possible.

 

My passion is helping people achieve their goals to live fulfilling lives full of experiences with the ones they love. I only feel good about doing that when I believe I’m doing my best, doing it the right way, and being compensated fairly.

 

To learn more about the fiduciary standard that I’m upheld to, check out this article on Forbes.

 

To learn about the difference between the fiduciary standard and the suitability standard, check out this article on Investopedia.

Unde

What's the difference between flat-fee and AUM?

The biggest difference between a flat fee and AUM for pricing financial advice is the service. I always tell people that you get what you pay for.

 

I also tell people that I don’t merely manage the wealth my clients have built; I PROACTIVELY help them build wealth! I’m not passive in this relationship.

 

Service Differences

While I know some firms that charge only an AUM fee on the assets they manage to provide excellent financial advice, from what I’ve seen, it’s more common to receive mostly investment advice and financial planning lite.

 

However, the biggest issue, and the #1 issue for real estate investors, is the conflict of interest that arises when billing on an AUM basis vs. a flat fee.

 

An advisor getting paid from AUM doesn’t get paid for assets they don’t manage, i.e., real estate, (most) retirement plans, etc., so many refuse to advise on those assets.

 

However, as a flat-fee advisor providing comprehensive financial planning, I get paid for my service regarding your entire financial situation. I’m incentivized to address everything for you and help you optimize everything.

 

Being flat-fee holds me accountable for providing you with financial planning – because you pay for it – and investment management if you need it!

 

Because I’m paid for the planning process, I’m incentivized to be available for meetings. And because I’m a real estate investor with a high level of expertise in real estate investing, I’m glad to advise my clients in those areas by blending my investing experience and expertise with my tax and retirement planning expertise. This is perhaps the greatest advantage I have compared to more generalist advisors.

 

Cost Differences

Based on my pricing for my service and expertise, compared to an advisor charging a 1% AUM for investments and financial planning, my prices are a bit of a premium expense for anyone with a net worth or investment assets of less than ~$400K to $500K.

Between the ~$400K to $800K range, I’m pretty much a break-even, give or take, with the 1% AUM fee.

 

But for anyone with a net worth over ~$800K to $1M, I become a massive value and even more so every year as my clients’ assets grow while my fee remains the same! 

 

My Recap Of Fees & Value

To recap, I’m a premium fee for a premium service to help people actively build wealth early on in their journey. But as they build wealth, they grow into my fee model, which pretty closely matches what a 1% AUM fee would cost them. Then, beyond that ~$1M mark, I become a massive bargain as I continue adding exceptional proactive value and expertise but without the increased cost every year like a flat AUM percentage does. (While the 1% AUM fee may remain the same, the dollar amount you pay each year increases as your investments grow, creating a huge drag on your portfolio’s performance.)

 

I believe that I separate myself early on in the journey when my fees are higher than simply going with a 1% AUM advisor by providing exceptional service and expertise that far exceeds that of the advisors with hundreds of “little” clients paying them a few thousand every year. In contrast, my clients who pay me receive proactive prompts and an action plan to achieve their goals with the accountability to follow through.

 

To me, that’s the biggest benefit of working with an independent advisor who doesn’t have hundreds of clients for whom they don’t have time because they’re mostly focused on investment management and bringing in more AUM. I digress!

 

What does it mean to be a “fee-only” financial planning firm?

I am proud to be a fee-only financial planner.

 

What does this mean?

 

Fee-only financial planners are paid solely by their clients, as opposed to the approximately 85% of financial advisors who are paid either entirely or partly by commissions from the sale of investment or insurance products.

 

Do you pay “load fees” on your investments?

 

Are insurance products like annuities or whole life insurance regularly pushed or encouraged?)

 

How an advisor is paid directly influences his/her investment and insurance recommendations, creating conflicts of interest for which the profession is known and why there’s such a lack of trust in the entire industry!

 

Being fee-only minimizes conflicts of interest between me and my clients because they can rest assured that when I make specific investment or insurance recommendations, I’m not under the influence of commissions or kickbacks, as it can be with advisors who aren’t fee-only. I’m free to advise what is in your best interest without the internal struggle of whether I will earn a commission or not.

 

This is also one of the greatest benefits of working with an independent advisor who is not part of the big firms we all know! Most large firms receive massive amounts of money from various investment and insurance companies. As such, the advisors who work for those firms are “encouraged” to use those products regardless of whether they’re the best for the client or merely suitable.

 

So, it’s very important for me and my clients to know that I’ve done as much as possible to remove any financial incentive for making a recommendation so they can rest assured that I’m advising in their best interest. 

 

What does it mean to be a “flat-fee” firm?

In addition to being fee-only, I’m a flat-fee financial planner.

 

The flat-fee model is a modern pricing model for clients and planners who value transparency and a more even match between the value and services paid for and the cost.

 

This makes it easier for the client to answer the question: Does the value justify the fee?

I always tell people to look at what they pay for. If you’re paying a percentage of your assets under management (AUM) for investment management, then what I believe to be true is that you’re paying for investment management with financial planning on the side. And most people don’t even know what their AUM fee translates to in actual dollars. So they have no idea what they’re actually paying for the service!

 

Benefits of Flat-Fee

However, as a flat-fee financial planner, you’re paying me primarily for comprehensive financial planning—cash flow management, reserves, investments (stocks and real estate), insurance and risk mitigation recommendations, estate planning, and, of course, tax planning—all with the end goal of you achieving your financial goals! You’re paying me to proactively help you achieve financial independence, not merely manage your investments and answer questions as you ask them. The difference between those is huge!

 

Another massive benefit of the flat-fee model is that as your net worth and investable assets increase, the flat-fee model becomes an even more incredible value and bargain compared to the more commonly used AUM fee model. This is especially true for those nearing retirement or in retirement who continue to pay a fixed percentage of their assets for a fee despite most of the work already being done and their advisor doing very little regarding tax planning, Roth conversions, etc.

 

Flat-Fee For Real Estate Investors

Finally, for real estate investors and anyone not wanting to hand over complete control over their investments, the flat fee model removes that conflict of interest of me wanting to have all of your assets under my investment management so I can bill on them. For example, an advisor charging a 1% AUM fee makes less money if you hold real estate, so they’re incentivized to encourage you to sell it and invest it with them. Their 1% stays the same, but they make more dollars! 

 

Flat-fee removes this conflict.

 

What do I charge?
I charge a flat annual fee (billed quarterly) based on the complexity of your situation, your needs, and whether you want investment management (optional) or real estate planning and coaching (optional). Most clients pay between $6,000 and $15,000 annually for comprehensive financial planning, real estate coaching and planning, and investment management (if they desire). We’ll discuss it and make sure it makes sense to both of us and that we each feel we’re getting a great deal.

 

What qualifies you to serve real estate investors?

I was that guy who needed proof that real estate was a great investment.

 

I read Rich Dad, Poor Dad in 2003 for my Econ class. The book completely transformed many of my views of finance and investing, but real estate sounded too good to be true and complicated. Graduating in 2006, going straight into grad school, and finishing up in 2007 didn’t help. Then, when I joined the Army in 2010 to go to physical therapy school, I met multiple people who had been buying a house at each duty station (common advice in the military!) and were severely underwater and struggling severely; many had lost a significant amount of money.

 

So, I decided to stick to what I knew—the stock market. While it wasn’t good then, it had bottomed out around the same time I began to make enough money to invest, and the numbers made more sense to me. So, I literally began learning about the stock market at the best possible time, and I dug in.

 

However, with the benefit of hindsight, we all know that was also one of the best times (OK, maybe ~2012 was!) to begin investing in real estate!

 

The bottom line is this – I needed convincing that real estate was a good investment.

 

When It Began Making Sense…

When I found Bigger Pockets in 2017, the process of convincing began. I went from a skeptic who thought it sounded too good to be true and too much work, time, and risk to a believer.

 

The first thing that began to stick out to me was the tax benefits. That really spoke to my financially-minded mind.

 

From there, digging into the numbers and learning how to analyze properties was the step that took it home for me. But we lived in Germany then, and I didn’t want to be a long-distance landlord. So, I began practicing analyzing deals with the intent to buy a property once we returned to the States.

 

Fast-forward to when I was transitioning from active duty in the Army to the Reserves and into my new future career as a financial planner, I set the goal of buying a multifamily property within a year.

 

For all the obvious reasons, the economy of scale, tax benefits, and the opportunity to force appreciation in multifamily spoke to me.

 

My Portfolio

My first property was a 9-unit building in Ohio (I’m definitely a long-distance landlord!) that I bought in 2022 that had a mostly empty basement (actually, it was full of crap, but lots of space for more units!). I bought it with the vision of turning it into a 12-unit. I’m nearing the end of that process, and while it’s gone slower than I expected, the lessons I’ve learned and the successes I’ve experienced have been entirely worth it. That property should be finished this fall, and I expect it will generate around $110,000 of net income per year once stabilized and I’ll have created about ~$300,000 of passive suspended losses via cost segregation studies and bonus depreciation to help offset that income!

 

This is why I love real estate!

 

In addition, I tested my preferred strategy by BRRRR’ing a single-family home in Austin, TX. However, due to property taxes and the nature of that market, I’ll likely sell it at some point and go all-in on multifamily.

 

In addition to direct ownership, we’ve also made a couple of private loans and invested in a couple of syndications. When vetted properly and viewed appropriately, I believe syndications can play a beneficial role in someone’s retirement plan.

 

My Real Estate Investing Education

In the end, I’m always going to be a believer in education. I’ve always learned best by studying first and doing second.

 

I believe Robert Kiyosaki said it best – “Education is cheap, experience is expensive.”

Why wing it when it comes to 6-7 figures of money? Learn from the best and other people’s mistakes; that’s my philosophy.

 

So, in addition to what I learned about real estate taxation in the CFP® education, I also completed the Real Estate Financial Coach Course taught by a handful of highly successful, experienced, and financially savvy financial advisors and CPAs who are also real estate investors and work with real estate investors. I learned so much from this course, and I always recommend it to financial planners, CPAs, and even attorneys who work with real estate investors!

 

I’ve also begun the CCIM (Certified Commercial Investment Member) designation curriculum because most of the best market and financial analyses of real estate that I’ve read and studied have come from people with this designation. I love the financial analysis aspect of real estate investing and want to continue bettering myself in this area, as I’m also strongly considering becoming a GP. I believe this is one of the greatest areas of value I add to my clients, so I want to invest more in this area to add even more value!

 

Because I value real estate tax strategy so highly, I also became a tax strategy client at Hall CPA and have learned so much from them. I believe they’re the best, if not the best, at providing real estate-specific tax strategy and education. They’ve taken what I learned in the CFP® program and added mountains of tax knowledge and wisdom.

 

I’ve also joined a couple of great real estate investment masterminds and coaching groups that have been very beneficial.

 

The first group is The War Room Mastermind, which is for service members and vets only. It is a solid group of successful real estate investors and people wanting to join those ranks. I’ve learned a ton, and I contribute as much as I can. If you check it out, let Dave know you heard about it here! (I don’t get any referral fee or kickbacks for mentioning it!)

 

The second coaching group I joined was Jake & Gino. I have always loved their approach, and they have always resonated with me. They were some of the first gurus talking about multifamily back in 2017 when I began learning more that presented it realistically and legitimately. I appreciate their approach to real estate, and I’ve loved being part of their program.

 

Ultimately, I aim to pass on the education, knowledge, and experience I’ve learned from all this education and my mentors to my clients! Trust me, let me pay the membership fees for you and help you learn from others’ mistakes!! But whatever you do, don’t make mistakes with your investments! 

 

My passion is maximizing the benefits of real estate investing for clients’ journeys to financial security, independence, and, ultimately, freedom!

 

I love seeing what adding real estate to a client’s portfolio does to their retirement planning projections. Sometimes, the benefits are modest; other times, they’re so significant that the client can potentially retire YEARS earlier! That’s awesome! And I love being the person who shows them how it works, teaches them what to do, and then helps them make it happen!

 

Who is your ideal client?

My ideal client wants to achieve financial independence through real estate and investing.

 

 

Their goal is to build their passive and investment income to the point where it replaces their job income.

 

They may be young and just starting out and need more education, coaching, and strategy to get that first or third deal. However, some clients also have a pretty solid rental portfolio, and they’re looking to analyze their portfolio to make it more tax-efficient and improve their ROI while considering selling poorly performing properties.

 

Or, they may be mid-career or nearing retirement, realizing they’re not where they want to be, and are open to aggressively investing in real estate to catch up.

 

And, because I enjoy working with them, around ~20% of my clients are retirees or nearing retirement (with or without real estate investments). I’ve found I enjoy having a little variety in my client mix. The retirees I’ve been working with are so enjoyable, and I’ve learned many life lessons from them that I pass on to my “young(er)” clients!

 

Do you work with clients virtually?

Yes!

 

While Cornerstone Financial Planning is a local fee-only financial planning firm in Colorado Springs, CO, the firm is a registered investment adviser (RIA) offering advisory services in the State of Colorado and other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by CFiP in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant to an applicable state exemption.

 

For local clients, I enjoy meeting you in person as well, as we are able!

 

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